After yesterday’s long article about the Big Three and their Big Problems, Scott wrote a thoughtful response.
There were a couple of common misperceptions in there regarding SUVs, though. In particular, the misperception that because oil was cheap in the ’90s that boosted the SUV boom.
While the fuel prices have certainly had a major effect on the auto industry, it wasn’t cheap gas that sparked the SUV craze that lead to the single-minded corporate focus on those huge trucks.
It was John Denver.
A semi-brief history of the SUV:
In the ’60s there was a surge in ownership of Toyota Land Cruisers, AMC Jeeps, and Land Rovers. At the time there were no market incentives for buying these light-duty trucks. People in rural areas simply discovered their practicality. (So many Land Cruiser stories I could tell right here….)
But that growing popularity wasn’t just in rural areas. Upclass New Yorkers (in particular) were purchasing them as well. Being outdoorsy was becoming quite popular with a new interest in mountaineering, caving, rafting, etc., really coming into its own. In fact, the early ’70s is considered a high-water mark for a lot of those rugged outdoors activities.
This can be typified by John Denver’s Rocky Mountain High, which hit #9 in 1973. Danner and Raichle hiking boots were becoming shoes not just for campers and climbers, but for regular folks much as today with wearing Timberlands to go to the grocery store. The outdoor look and lifestyle was in.
This might seem like a minor point of interest, but in reality it was a major turning point for the industry. AMC was on the brink of disaster. Their cars, quite simply, stank. The only hope they had was the Pacer, and we know what happened there.
But one thing was starting to change at AMC. Out of nowhere, the Jeep started to sell like crazy. At the time you didn’t buy Jeeps from an AMC dealership, but rather from gas stations (seriously). So AMC decided to market the hell out of the Jeep to latch on to this new culture, and to start making them a focal point in their showrooms.
At the same time, AMC was looking for Federal help. Even with the uptick in Jeep sales, AMC was headed for disaster. So, they asked the Feds to reclassify the Jeep as a truck. This helped them avoid a number of emissions and safety regulations.
And then it hit.
Jeep sales frickin’ took off in one of the best cases of serendipity in the auto industry.
Ford, who had already noticed what was happening, took the opportunity to revitalize the Bronco. GM built the Jimmy and then the Blazer. International Harvester repackaged the good yet awful Scout into the gooder and awfuller Scout II.
These trucks were becoming the hip vehicle to be seen in. No one realized that part of their ruggedness was due to tax incentives and a lack of safety and emissions regulations.
Anyway, a lot more happened after that including AMC suckering the Government into creating a regulation that effectively brought an end to the Toyota Land Cruiser FJ-40 in the US. Jerks.
But the basic trend that started there continued. Trucks could continue to be built at a low cost because of their lack of development. Nearly all remained body-on-frame with cart springs until the mid-size SUVs started coming out.
So the price of gas wasn’t really a factor in the popularity and success of the SUV. Though it certainly helped prolong the life of the SUV craze, it’s not what really started it. A combination of lobbying, Federal handouts, and latching onto trends is really what happened.
That takes care of the fuel-prices/SUV relationship. But the other misconception is that the Big Three have been completely technologically backwards.
But as far as being advanced, the truth is quite shocking.
In 1993, the Partnership for a New Generation of Vehicles (PNGV), a Federally sponsored program, was initiated to help the auto industry produce high mpg cars.
GM, Ford, and Chrysler were well ahead of the curve when it came to producing hybrids. Each had developed 72mpg+ diesel hybrids along with a number of other advancements (carbon foam, clean diesel technology, hydrogen conversion technologies, and so on).
Then, in 2001, the Bush Administration cancelled the program at the request because, basically, the industry said "it’s too hard." Admittedly, part of the problem was Federal stupidity in that the Big 3 were targeting diesel while at the same time the Feds were implementing tons more restrictions on diesel, effectively killing diesel in the US market.
But even with that, the industry had the ability to beat Toyota to market. And they certainly had the lobbying clout to keep the new diesel restrictions for affecting the consumer car market.
So why didn’t it happen? The exact reasons I mentioned in the previous article played a major part. Shareholders didn’t see the value in a low margin car like the PNGVs. Management had to keep the shareholders happy, nor did they have the technical expertise to understand the value of these vehicles. And unions certainly feared new technology–how much do you pay a fuel cell specialist? And does adding this new technology mean that the old guard of fabricators will lose their jobs?
Yr fthfl bddy,
Mike